Palm oil gains with soybean on supply concern

Written by Agencies | Kuala Lumpur, January 29: | Updated: Jan 29 2008, 20:16pm hrs
Palm oil futures in Malaysia, the global benchmark, rose on optimism demand for vegetable oil for food and fuel may exceed supply. Soybean oil prices also gained.

Palm oil, the main substitute for soybean oil, for April delivery gained 2 per cent to 3,212 ringgit (922 dollar) a tonne on the Malaysia Derivatives Exchange. Soybean futures in Chicago rose for a fourth day, gaining 0.3 per cent to 52.68 cents a pounds.

Palm oil typically moves in tandem with soybeans, which are crushed into soymeal for animal feed and soybean oil. The price of the oilseed has risen 77 per cent in the past year after US farmers planted the fewest acres in 12 years.

Soybean futures for March delivery climbed a fourth day, gaining 0.2 per cent to 12.56 dollar a bushel on the Chicago Board of Trade in after-hours trading.

Palm oil is also used for making bio-diesel for blending with fossil fuels to reduce costs. In Europe, rapeseed oil is used for bio-diesel.